The outcomes, objectives, limitations and enablers of Corporate Venture Capital investing in South Africa

Abstract

In light of the emergence of corporate venture capital activity in developed markets, resulting in a large portion of start-ups being invested in by corporate venture capital investors, this research paper explored the activities, objectives, outcomes, limitations and enablers of corporate venture capital investments in South Africa. The research process consisted of a literature review that analysed international literature and where available, literature pertaining to the South Africa, focusing on objectives, outcomes, limitations and enablers of corporate venture capital investments in other markets. Twelve unstructured interviews were conducted with corporate venture capitalists, entrepreneurs and independent venture capitalists. Ethical compliance was observed during every interview, ensuring that the integrity of the data was maintained. The data was analysed with the assistance of computer-assisted qualitative data analysis software (CAQDAS). The research found that the corporate venture capital market in South Africa is underdeveloped in comparison to international markets. There are no distinct strategies employed by those individuals interviewed. However, the outcomes, objectives, limitations and enablers were similar to those in international markets. A framework has been suggested to assist corporate venture capital investors in South Africa, ensuring that they are aware of the objectives, outcomes, limitations and enablers that they could encounter when performing corporate venture capital investments.